K.J. PAUL Vs. TRINITY ARCADE P. LTD.

JUDGEMENT

(1.) THE present application is filed by the applicant/petitioner under section 634A of the Companies Act, 1956 read with regulation 44 of the Company Law Board Regulations, 1991, praying this Bench, inter alia, to direct the respondents to register the land admeasuring 17.197 cents situated at Edapally village, Ernakulam in the name of the applicant within a short period. Dr. K.S. Ravichandran, learned practising company secretary appearing for the applicant submitted that the applicant had filed a petition under various sections being C.P. No. 91 of 2010 before this Bench seeking various reliefs against the respondents. The parties to the company petition entered into settlement agreement on November 12, 2010. On the basis of consent terms as stated in the settlement agreement, and on the basis of the joint compromise affidavit filed by the parties this Bench passed an order on November 19, 2010, recording the compromise and disposed of the company petition as settled. It is also recorded that the joint affidavit and the settlement agreement dated November 12, 2010, do form part of the order. Further the Bench granted liberty to apply for enforcement of the order. The broad consent terms are as follows. The applicant irrevocably and unconditionally agreed to transfer two lakhs fully paid -up equity shares, held by him in respondent No. 1 company to respondents Nos. 2 to 5 such that each 50,000 shares for total consideration of Rs. 40 lakhs and each party need to pay a consideration of Rs. 10 lakhs each. The applicant, irrevocably and unconditionally agreed to transfer 10,000 fully paid -up equity shares held by him in Green Leaf Builders and Developers (India) P. Ltd., to respondents Nos. 2 to 5 such that each 2,500 shares for a total consideration of Rs. 30 lakhs and each party is liable to pay a sum of Rs. 7,50,000. As a result of transfer of shares, the applicant does not have any shares at all in the capital of the Green Leaf Builders and Developers (India) P. Ltd. Respondents Nos. 2 to 5 irrevocably and unconditionally agreed to transfer the 40,000 equity shares fully paid -up, held by them, in Cavalier Developers (India) P. Ltd., to the applicant for a total consideration of Rs. 40 lakhs. As a result, the applicant becomes the owner of 100 per cent. shares in Cavalier Developers (India) P. Ltd. Further respondent No. 1 company, i.e., Trinity Arcade P. Ltd., and respondents Nos. 2 to 5 unconditionally agreed to endorse and approve to sell the company's land measuring about 17.197 cents covered in Survey Nos. 61/3D2, 61/3A4 and 61/3D2 owned by respondent No. 1 company situated in Edapally village, Kanayannur Taluk in Emakulam District to the applicant herein for a consideration of Rs. 30 lakhs and assured that respondent No. 1 company would issue necessary receipt/acknowledgment for receipt of the consideration. On compliance of the above, the applicant agreed that he would resign his directorship from both the companies, i.e., respondent No. 1 company and Green Leaf Builders and Developers P. Ltd. It is submitted that after signing the settlement agreement, the applicant had transferred two lakhs fully paid -up shares held by him in respondent No. 1 company to respondents Nos. 2 to 5 and resigned from the post of director in respondent No. 1 company on November 12, 2010. Further the applicant transferred his total 10,000 shares held by him in Green Leaf Builders and Developers P. Ltd., to respondents Nos. 2 to 5 and resigned from the post of director on November 12, 2010. Respondent No. 1 company had already issued a no due certificate to the applicant stating that there is no due from the applicant to the company. The no due certificate was signed by respondents Nos. 2 and 4. Respondents Nos. 3 and 4 also transferred their shares held in Cavalier Developers P. Ltd., to Mrs. Bindu Paul, wife of the applicant herein and to the applicant herein on November 12, 2010 and both resigned from the posts of director in Cavalier Developers P. Ltd.

(2.) IT is submitted that as per the settlement agreement the respondents have to sell the companies land in Edapally measuring 17.197 cents to the applicant. It was also approved in the extraordinary general meeting of respondent No. 1 company held on November 10, 2010 and the resolution was passed to transfer the said property to the applicant herein or his nominee for a consideration of Rs. 30 lakhs. However, the respondents failed to take any further steps to comply with the terms of the agreement. Respondent No. 1 company sent a letter on January 10, 2011, stating that the applicant has not taken any steps to purchase the land as agreed in the settlement agreement. The applicant had sent a reply on January 19, 2011, to respondent No. 4. Respondent No. 4 vide his letter dated January 24, 2011, stated that unless the applicant pays the consideration of Rs. 30 lakhs the sale deed cannot be executed. Also, the stand of the respondents that the transfer of shares in respondent No. 1 company and Green Leaf Builders and Developers (India) P. Ltd., the consideration should be effected by book adjustment but the sale of land in Edapally would be carried out only upon payment of consideration of Rs. 30 lakhs is completely contrary to the settlement terms and highly oppressive and unfair on the part of the respondents to demand payment of consideration at this point of time when the order of this Bench has become final, binding and enforceable on consent terms. In view of the reasons, he prayed this Bench to allow this application.

(3.) HEARD the learned practising company secretary and counsel for the respective parties, perused the pleadings and documents filed in their support. The crux of the issue in this application is in regard to enforcement of the order of this Bench dated November 18, 2010. This Bench, after taking into consideration the joint affidavit of compromise filed by the petitioners and the respondents, disposed of the company petition as settled. The Bench recorded the compromise. It is essential for me to take note of paragraphs Nos. 1 and 5 of the joint affidavit dated November 12, 2010, which read thus :